How saving can affect your mental health:
People who are saving money and follow a budget often tend to be happier and more satisfied, according to a study done by the University of Arizona. The study analyzed 968 adults between the ages of 18-21. They had them answer questions about their spending and budgeting habits. The researchers asked the same questions two years later and again when these same people were 23-26. They also asked the young adults about their mental health and how satisfied they were with their lives. Unsurprisingly, people who saved more answered that their overall well-being was higher than those that consumed more and saved less.
Practicing sustainability and healthy financial habits can decrease stress and increase one’s health and happiness. Feeling good about what you buy and being on solid ground in regards to money helps you feel better about yourself. Reducing the buying of materialistic goods has a positive impact on the environment and can help one reevaluate their values and beliefs. You can take a more mindful approach to life if you aren’t spending recklessly and you live, instead, with intention.
How your mental health can affect your saving habits:
Consequently, your mental health can also have an effect on your saving and spending habits. It is easy to say that lists and spreadsheets help you budget and can help you cut costs. In order to get a more realistic image of one’s spending habits, one has to look to one’s mental health. In stressful times such as a breakup, or the current pandemic, we often spend more or inconsistently than we usually do instead of saving money. However, identifying this can help you address it before the consequences become more serious.
Spending too much or “splurging” can become a serious addiction. Sure, splurging every once in a while is not going to hurt you. Doing this more than one should, however, because of a need for immediate gratification is destructive. There is a short-term feeling of release after a “retail therapy” session, but it can have devastating effects on one’s credit card debt. If you tend to shop in order to cope with stressful situations, consider locking your credit or debit card during these times, keeping things in your cart for at least a day if you are shopping online, and create a list of rules that you follow while shopping.
This can also go the other way, however, as some become too frugal in situations of anxiety and fear. Hoarding your savings or living more simply can be a good thing, but it is easy for a lot of people to get stuck in this cycle and prevent you from enjoying your life. If you are stressed about money, try to set aside money for yourself, create a new budget, and think about where the anxiety about money is coming from.
Navigating through stressful times such as unemployment or the current pandemic is hard. There is no doubt that saving money is challenging. It is important to remember though, that there is always a way to address the bad habits or the stress that currently exist in your life. It is okay to go through periods where we do not always make the best decisions. However, acknowledging this and practicing self-care is the first step.